Valens GroWorks Corp. (TSXV: VGW) (OTCQX: VGWCF) gave revenue guidance for the fourth quarter of 2019 in the range of $27 million to $30 million. This is a big jump sequentially for the company as it delivered revenue of $16.5 million in the third quarter of 2019.
“I couldn’t be more thrilled to share revenue guidance for Valens’ fourth quarter, which I believe is only starting to show the power of our platform,” says Tyler Robson, CEO of Valens. “The reason we have built five different types of extraction in house is so that we can facilitate being a one-stop for our customers by having the means to produce a large variety of next-generation white label products. This quarter shows the flexibility of our operations and represents an inflection point in our acceleration into “Cannabis 2.0″ oil-based products. Through the incredible demand we are seeing, we expect white label sales to continue to ramp up as we increase the number of white label contracts and volume of the contracts themselves.”
Valens also said that it expects to report that it has extracted over 24,400 kilograms of cannabis and hemp biomass in the fourth quarter of 2019. “This is roughly in-line with the amount of biomass processed in Q3 2019 and reflects the anticipated shift in focus to white label manufacturing and the demand from our customers to launch a breadth of “Cannabis 2.0″ products into the market. This breadth of products translated into smaller lot sizes and resulted in a temporary pause from the volume ramp seen in previous quarters but also resulted in a significant increase in our revenue per gram of input performance.”
In addition to giving a heads up on the increasing revenue, Valens said it is planning to launch a Normal Course Issue Bid or NCIB for the purchase and cancellation of up to 6,275,204 shares, representing approximately 5.0% of the issued and outstanding Shares, calculated on a non-diluted basis. The NCIB is expected to run for a period of one year from when it is formally commenced.
The company said it believes that the NCIB is a prudent and appropriate approach to maximize shareholder value. Having an NCIB in place will provide the company with the flexibility to purchase shares, from time to time, at the company’s discretion, as part of its capital management strategy, subject to applicable black-out periods and trading restrictions. The NCIB will be funded with cash on hand and the company’s current positive cash flow from operations.